Health Panel Bemoans Tobacco Proposal

Many Barriers Seen To Nicotine Regulation

WASHINGTON — Public health groups on Wednesday attacked a proposed $368.5 billion tobacco settlement, saying it would hamper the government's ability to regulate nicotine and would not impose adequate financial sanctions on the industry.

"Absolutely unacceptable" and "woefully inadequate" summed up the Advisory Committee on Tobacco Policy and Public Health's reading of the accord reached Friday between tobacco companies and 40 states suing them to recoup the costs of treating sick smokers.

The seven-hour debate Wednesday among groups that are essentially on the same side in the tobacco wars illustrates the difficulties that lie ahead for the pact.

If these groups do not believe that the public health benefits outweigh the political costs of cutting a deal with an industry many of them have opposed, the agreement could be doomed.

Convened June 5 by anti-tobacco lawmakers in Congress, the committee comprises about 20 public health advocates and is headed by David Kessler, former head of the Food and Drug Administration, and former U.S. Surgeon General C. Everett Koop.

On the issue of the FDA's ability to regulate nicotine, the group was adamant. A federal judge ruled April 25 that the FDA has such authority, and assuming that ruling is upheld on appeal, anything that abrogates that authority would likely be a deal-breaker.

The proposed settlement sets high barriers to regulation, forcing the FDA--rather than the industry--to prove that regulation will reduce health risks, is technologically possible and wouldn't result in a black market for unregulated tobacco products.

Washington lawyer Stephan Lawton, who was asked by the American Cancer Society to scrutinize the settlement, said that forcing the FDA to prove no black market would develop is "full of mischief."

Regarding the pact's targets for reducing underage smoking, the group determined that proposed reductions of 30 percent after five years, 50 percent after seven years and 60 percent after 10 years aren't stringent enough.

The committee proposed that reductions begin to be measured in the second year rather than the fifth and said that it doesn't consider 60 percent reduction an acceptable final goal.

"The goal should be zero tolerance of underage tobacco use," said Dr. Robert Graham, of the American Family Physicians group.

"The temptation for a black market to develop increases as you approach 90 percent," countered Koop. "You have to separate smoke use from smoke sales."

The sanctions proposed if the industry fails to meet those targets--$80 million or the profits the companies would make from underage smoking in a given year--are inadequate, according to the group. It first proposed trebling them to $240 million, but later decided they may need to be even greater.

The sanctions, the group decided, need to be "predictable . . . severe. . . based on total revenues" and have an "impact on shareholder value." They also need to be paid from after-tax profits and be assessed on a company-by-company basis rather than industrywide.

The sanctions must be structured, said Dudley Hafner, chief executive of the American Heart Association, so there is "no way the industry can make a profit by selling to underage smokers. They have to be punished."

William Novelli, president of the Campaign for Tobacco Free Kids, reminded the group that "the tobacco industry is not on the canvas. It has proved it can fight and they have powerful allies."

This proposed settlement, he added, "offers us weapons we don't now have to make fundamental change. I hope we're not going to miss this opportunity. But what I heard this morning makes me afraid that we will develop a utopian proposal--and a couple of shelf documents--that will drive the industry and its legislative allies away."

The White House has started its own review of the tobacco deal. Senior advisers said Clinton is concerned about Koop's and Kessler's objections to nicotine regulation and financial penalties.

Two top aides said a likely outcome would be for Clinton to not reject the settlement outright, because that would stall anti-tobacco momentum, but to say he would endorse it only if certain changes were made.

Health and Human Services Secretary Donna Shalala, who is helping lead the White House review, set a three-hour, agencywide meeting Wednesday to scrutinize the settlement in detail.